My Thoughts and Convictions

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I am happy to report that I will be returning to work soon after taking a short hiatus to recharge and not worry about making money. Now granted, we all need money and I don’t dispute this for one second. We need to eat and most of us prefer to eat well whenever possible. But while we need money, it doesn’t mean we need to making money all the time. If you’ve been reading my past entries, you already know that in May I decided to take the plunge, and in early July it officially started. Making money is like any other habit we have that is initially tough to break. My first two weeks were a bit odd, and I did keep worrying that I wouldn’t have enough money to last, and then I’d possibly take longer than expected to find another job. But nonetheless, I persisted and after some time, those thoughts slowly disappeared. As those emotions settled down, I eventually felt that it was OK to give myself time to relax, and not feel the slave bondage of trying to bring in income all the time. Once that mental break happened, my mind found a way to focus on more deeper issues that had to be addressed. Likewise, my mind also found it’s way to think about things I enjoyed doing, but without the burden of having to relate it to generating income (or the lack of). I did things simply because I enjoyed it.

I recall that before quitting my job, my mind habitually associated “right” answers with money. If it saved money, then it was the right choice. However, there are occasional exceptions like medical care. I’m more than willing to pay top dollar for the best surgeon in the county. It’s actually the smaller, and somewhat trivial things where we tend to make choices purely based on money savings. Take for example my choice to move out of my condo (where I had rented out the other rooms) and rent a room from someone else. This topic came up a lot amongst my friends and acquaintances, and many people will generally like to ask whats going on with my life. So naturally the easiest answer is “I just moved to a new place.”

Before I continue, let me take a brief moment to explain a bit about the economics of renting a room versus an entire house versus a single bedroom apartment. There is a slight fundamental difference and it works this way – the market rate of a room isn’t necessary proportional to what it costs to rent that entire house where the room resides. When tenants look for rooms to rent, they usually compare it to what it costs to rent their own place, like a studio or a one bedroom apartment. For example, assume a 3 bed / 3 bath house can rent for $1800. This means the argument could be made that each room should be rented out for $600 ($1800 / 3). It doesn’t work this way. It’s also necessary to see what a one bedroom could go for – in my area $1200 is typically the low end, but the more desirable apartments were between $1300 and $1400. Also, there weren’t many studios in the area. If a tenant is faced with the prospect of paying $1300 for a 1 bedroom apartment AND all of the necessary utilities, almost anything could be perceived as better. From my own experience, each of those rooms could actually easily rent for $800 if the upkeep is good and the landlord is a decent enough salesman. $800 looks VERY attractive because in the tenants’ minds, they are comparing it to the cost of a place to live on their own. They’re saving at least $500/month and reduced utilities, and the thought of saving this absolute amount of money is more than enough to convince them $800 is downright “steal.” They aren’t actually thinking “hmm…if this place could rent for $1800 in total, that means I should only pay $600.” It may seem surprising, but it really doesn’t work this way. In addition, if they chose to rent a big house and find roommates, there’s the hassle of finding a suitable roommate, and the risk that they could be liable for more rent if they cannot find a renter to take one of the rooms. Many tenants can’t swallow that kind of risk. If they rent only a room in a big house, their rent is not tied in anyway to the vacancy of another room. In short, a landlord with decent sales skills that chooses to live in one room and rent out the others usually can save a lot in living expenses, just like I had experienced for over 5 years.

Okay, so with that out of the way, the point I am getting at is people would then follow up by asking me if I was saving money. The automatic assumption was that I wanted to save money. In fact, I was not saving money. Their facial reaction explained a lot – they thought I was making a mistake. Their minds are glued to the habit of labeling decision as correct or right only if there was a positive impact to money. Any further follow questions continued to revolve around money. If they were potentially open to finding out why I really chose to move out, questions were prefixed with “why would you….(do such and such)?” The prefix words and tone in the question are subtly STILL suggesting that I am making a bad decision or going against some kind of defined common sense.

We often hear, “there’s more to life than money,” but more often that not it stays as a saying and not much more. We still continue to revolve our decisions around how much money we stand to gain or lose. When I decided to move out, it was for a life style change. While I saved lots of money as a live in landlord, there were also many downsides, and these downsides are specific to a person’s individual personality. In my case, I had these issues that regularly clouded my mind (and that translates into wasting precious time) while living with numerous tenants throughout the years:

I am particular about where things are placed, so it bothered me when things are not put back as it was found.

I don’t like wasting electricity by leaving lights on in rooms that are not used, but my tenants couldn’t break their habit of leaving all the lights on.

Tenants left their TVs or mini heaters on in their room while not at home, and their doors were locked.

I liked keeping the common areas clean, but the coffee and dining tables were constantly cluttered with mail, magazines, and any other random items that belonged to the tenants.

While not life threatening, sometimes I didn’t really like the guests that my tenants brought over because I felt they were unfriendly.

Some tenants didn’t shower enough.

The kitchen was regular cluttered or greasy.

I can easily adjust to the weather by dressing light or heavy, but the tenants didn’t want to, so that meant the AC or heater was regularly left on.

You get the idea – tenants simply don’t maintain the household the same way as I did because to them, they were just renting. And they didn’t care as much about utilities because they only paid 1/3 of it – there was no way to accurately measure how much each person actually consumed. Even if I reminded them to stop the bad habits, it would continue regardless. If I became too difficult, then it would be hard to keep any tenants because of my attitude. Something had to give – I had to let loose a little, but in the end, it all still bothered me because that’s simply who I am.

So it made sense for me to move to simplify my life. It wasn’t about saving money. The only money concern I felt was worthwhile to think about was whether or not the hit had any practical impact on me. So suppose I stood to lose a net total of $300 per month, from the bigger overall picture did this difference really matter? Another way to ask this is, can I afford this decision? Or as I once heard, “does the difference make a difference?” The answer, of course, was no. The subjective pros drastically outweighed the financial cons.

This was a rather long example, but I wanted to illustrate that sometimes it is necessary to break the habit of labeling decisions as right or wrong based on the immediate financial impact. In fact, by moving out, I’ve freed up my mind to think about more important areas in my life, such as my career. Ultimately, this led to me making more money. But the results weren’t quickly realized. It took a few additional steps after the decision before it was realized. So I encourage people not to simply write down the pros and cons of a choice. Every decision ultimately has two choices. You either stay the same, or make a change. Take the time to write down the positives of both choices, and then think about which decision has the better positive.